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Audit Committee Considerations for Whistleblower Hotlines

Audit
committees should consider the following questions when assessing
the design effectiveness of a hotline:

Does
the hotline have a dedicated hotline number, fax number,
website, e-mail address, and regular mail or post office box
address to expedite reports of suspected incidents of
misconduct?

Does
the hotline demonstrate confidentiality, including showing how
caller ID, e-mail tracking, and other technologies cannot be
used to identify the whistleblower? Has the entity considered
use of an independent hotline operator to enhance the perception
of confidentiality in addition to any real
improvement?

Does
the hotline use trained interviewers to handle calls to the
hotline rather than a voice mail system?

Is
the hotline available 24 hours a day, 365 days a
year?

Does
the hotline have multilingual capability to support hotline
callers with different ethnic backgrounds or who are calling
from different countries?

Are
callers provided with a unique identification number to enable
them to call back later anonymously to receive feedback or
follow-up questions from investigators?

Does
the entity have a case management system to log all calls and
their follow-up and to facilitate management of the resolution
process, testing by internal auditors and oversight by the audit
committee? To download a sample tracking report that audit
committees can use for this purpose, click
here.

Has
the entity established protocols for the timely distribution of
each type of complaint, regardless of the mechanism used to
report the complaint, to appropriate individuals within the
company and to the audit committee and board of directors where
appropriate? Are complaints of any kind involving senior
management automatically and directly submitted to the audit
committee without filtering by management or other entity
personnel?

Does
the entity effectively distribute comprehensive educational
materials and training programs to raise awareness of the
hotline among potential users? Are these materials available in
all relevant languages given the potential user base, and do
they take into consideration cultural differences that may
require alternative approaches to achieve the desired
goal?

Does
the entity support outreach to potential stakeholders other than
employees?

Do
the entity’s internal auditors periodically evaluate the design
and operating effectiveness of the hotline? What were the
internal auditors’ conclusions regarding (a) how the hotline
reflects changes in the company’s operations and in best
practices, (b) whether the hotline is receiving satisfactory
support from management, employees and other participants, and
(c) whether protocols established for forwarding information to
the audit committee have been followed?

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